Daily Market Lookup

Asian stocks slipped on Wednesday, dragged by losses on Wall Street as the technology sector stuttered yet again after a brief rebound, while the dollar sagged on lower long-term U.S. yields. Fed funds futures prices showed that investors see a rate increase at the Federal Reserve’s Dec. 12-13 meeting as a done deal with much of the focus now on the outlook for rates in 2018 and beyond. The U.S. trade deficit increased to a nine-month high in October due to rising oil prices and the widening of America’s long-standing deficits with China and Mexico. The worsening trade deficit came even as exports to China and Mexico were the strongest in more than three years, which some economists said challenged the Trump administration’s argument that the United States was being disadvantaged in its dealings with trade partners. The Commerce Department said on Tuesday the trade gap widened 8.6 percent to $48.7 billion, the highest level since January. The politically sensitive U.S.-China trade deficit increased 1.7 percent to $35.2 billion and the deficit with Mexico surged 15.9 percent to $6.6 billion. Economists polled by Reuters had forecast the overall trade deficit rising to $47.5 bn in October. U.S. financial markets were little moved by the large trade shortfall, which was flagged in an advance report last week. Republican President Donald Trump has blamed the trade deficit for the massive loss of U.S. manufacturing jobs as well as moderate economic growth. Trump has ordered the renegotiation of the NAFTA, which was signed in 1994 by the United States, Canada and Mexico. He told a group of pro-NAFTA Republican senators during lunch on Tuesday that the United States had trade deficits with “everybody.” When adjusted for inflation, the trade deficit increased to $65.3 billion, also the largest since January, from $62.2 billion in September. The so-called real trade deficit in October was above the third-quarter average of $62.0 billion, suggesting that trade could subtract from gross domestic product in the October-December quarter. The government reported last month that trade contributed 0.43 percentage point to the economy’s 3.3% annualized growth pace in the third quarter. The Trump administration believes a smaller trade deficit, together with deeper tax cuts could boost annual GDP growth to 3 percent on a sustained basis. Republicans in the U.S. Congress have approved a broad package of tax cuts, including slashing the corporate income tax rate to 20 percent from 35 percent. But the planned fiscal stimulus will come at a time when the economy is at full employment, which will boost imports and widen the trade gap. Imports of goods and services increased 1.6 percent to a record $244.6 billion in October. Goods imports were the highest since May 2014 amid a $1.5 billion increase in crude oil imports. Imported oil prices averaged $47.26 per barrel in October, the highest since August 2015. Exports of goods and services were unchanged at $195.9 billion in October as a surge in shipments of industrial supplies and petroleum was offset by sharp declines in and civilian aircraft exports. The ISM said its non-manufacturing index fell to a reading of 57.4 last month from 60.1 in October. Last month, a gauge of new orders received by services industries dropped to 58.7 from a reading of 62.8 in October. A measure of new export orders fell 3.0 points while imports rose 0.5 point.

Gold gained in Asia on Wednesday as heightened political risk regionally and in Britain and the US supported the yellow metal. Elsewhere, Sky News reported that an Islamist suicide attack was planned against Downing Street and British PM Theresa May, but was foiled by police and security services. There was little immediate reaction to reports that Deutsche Bank received a subpoena from US special counsel Robert Mueller related to his Russia election meddling investigation and the bank's business with President Trump. Jay Sekulow, one of Trump's personal lawyers, said Deutsche Bank has not received any subpoena for financial records relating to the president as part of Mueller's probe. Overnight, gold prices fell to six-week lows on Tuesday as dollar strength continued on the back of recent investor optimism surrounding tax reform. Gold prices fell as bullish sentiment in risk markets continued amid growing investor expectations that the Senate and House of Representatives will reconciled their respective bills, ensuring that the final bill will reach President Donald Trump for approval before year-end. Also weighing on the dollar was ongoing expectations that the U.S. Federal Reserve will raise interest rates for third time this year at the conclusion of its next meeting on Dec.13.

Oil prices dipped on Wednesday, as refined product inventories in the United States rose in what the market interpreted as a sign of lackluster demand. A worker prepares to label barrels of lubricant oil at the state oil company Pertamina's lubricant production facility in Cilacap. Traders said the lower prices came after a report by the API late on Tuesday that showed a 9.2 million barrel rise in gasoline stocks in the week to Dec. 1, and an increase of 4.3 million barrels in inventories of distillates, which include diesel and heating oil. The perception that the higher fuel stocks pointed to weak demand outweighed the fact that crude inventories fell by 5.5 million barrels, to 451.8 million, traders said. Outside the United States, analysts said that a supply cut led by the OPEC and Russia, which is expected to last throughout 2018, has helped Brent prices rise by over 40 percent since June, and by more than 130 percent since January 2016, when they hit their lowest level since 2003. With the supply cuts likely in place throughout 2018, analysts said crude prices were well supported. One factor that could undermine OPEC’s and Russia’s effort to cut supplies and prop up prices is U.S. oil production C-OUT-T-EIA, which has risen by 15 percent since mid-2016 to 9.68 million barrels per day, close to levels of top producers Russia and Saudi Arabia.

Intraday RESISTANCE LEVELS

6th December 2017

R1

R2

R3

GOLD-XAU

1,272-1,280

1,288

1,300

Silver-XAG

17.2016.50-16.90

17.20

17.50-18.00

Crude Oil

57.50

58.50

59.00-59.60

EURO/USD

1.1900-1.1990

1.2050

1.2090

GBP/USD

1.3660

1.3660

1.3660

USD/JPY

113.00

114.00

114.75-115.50

Intraday SUPPORTS LEVELS

6th December 2017

S1

S2

S3

GOLD-XAU

1,266-1,254

1,239

1,230

Silver-XAG

16.35-16.00

15.60

15.20

Crude Oil

57.00

56.00-55.40

54.70

EURO/USD

1.1800-1.1750

1.1700

1.1635

GBP/USD

1.3300

1.3300

1.3260-1.3200

USD/JPY

111.90-111.00

109.20

113.00109.20

Intra-Day Strategy (6th December 2017)

GOLD-XAU

Neutral

Silver-XAG

Neutral

Crude Oil

Neutral

EUR/USD

Neutral to Sell

GBP/USD

Neutral to Sell

USD/JPY

Neutral to Sell

Gold – XAU

Gold on Tuesday made its intraday high of US$1276.94/oz and low of US$1260.90/oz. Gold was down by 0.800% at US$1265.74/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1267) and breakage above will call for 1280-1290. MACD is below zero line and histograms are decreasing trend and it will bring upward stance in the upcoming sessions. RSI is in oversold region and more downside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Silver - XAG

Silver on Friday made its intraday high of US$16.54/oz and low of US$16.23/oz. Silver settled down by 0.001% at US$16.41/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 200DMA (17.16), breakage below will lead to 16.70-16.35. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving positive crossover to show upside move for the intraday trade.

Oil - WTI

Crude Oil on Tuesday made an intra‐day high of US$57.90/bbl, intraday low of US$57.07/bbl and settled up by 0.0174% to close at US$57.46/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.60 which is a major resistance and breakage above will call for 50.30-51.00. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 57.50-59.60 with stop loss at 59.60; targeting and 57.00-56.00 and 56.50-55.40. Buy above 57.00-54.80 with risk daily closing below 54.80 and targeting 58.50- 59.60 and 60.50-61.20.

Intraday Support Levels

S1

57.00

S2

56.00-55.40

S3

54.70

Intraday Resistance Levels

R1

57.50

R2

58.50

R3

59.00-59.60

TECHNICAL INDICATORS

Name

Value

Action

14DRSI

57.143

Sell

20-DMA

57.17

Buy

50-DMA

54.38

Buy

100-DMA

51.58

Buy

200-DMA

49.91

Buy

STOCH(5,3)

31.2600

Sell

MACD(12,26,9)

0.902

Buy

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.1800/EUR, high of US$1.1872/EUR and settled the day down by 0.337% to close at US$1.1825/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1700), which become immediate resistance level, break above will target 1.1750-1.1800. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider buy.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.3369/GBP, high of US$1.3481/GBP and settled the day up by 0.274% to close at US$1.3441/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3241) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving negative crossover to confirm bearish stance. MACD is below zero line and histograms are decreasing lead to downward movement.

Trading Strategy: Neutral to Sell

On daily charts, prices are sustaining above 50DMA (1.3241) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving negative crossover to confirm bearish stance. MACD is below zero line and histograms are decreasing lead to downward movement.

Intraday Support Levels

S1

1.3300

S2

1.3300

S3

1.3260-1.3200

Intraday Resistance Levels

R1

1.3660

R2

1.3660

R3

1.3660

TECHNICAL INDICATORS

Name

Value

Action

14DRSI

60.440

Buy

20-DMA

1.3307

Sell

50-DMA

1.3241

Sell

100-DMA

1.3176

Buy

200-DMA

1.2946

Buy

STOCH(5,3)

58.834

Sell

MACD(12,26,9)

-0.0069

Buy

USD/JPY

USD/JPY on Tuesday made intra‐day low of JPY112.37/USD and made an intraday high of JPY112.86/USD and settled the day up by 0.169% at JPY112.59/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (111.73), which is major support on the daily chart. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to sell as it has given negative crossover to confirm bearish stance.